Harworth reports double-digit return to shareholders

Residential properties at Harworths Waverley site in Yorkshire
Residential properties at Harworths Waverley site in Yorkshire
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Harworth Group, which specialises in the regeneration of former coalfield and other brownfield sites, has reported a double-digit return to shareholders thanks to its focus on "beds and sheds" in the North of England.

Rotherham-based Harworth said the 52,000 sq ft “R-evolution Phase 2” at the Advanced Manufacturing Park in Rotherham is now fully let.

It has also completed the third phase of "R-evolution" at the AMP, where Bodycote has taken a 15-year lease, leaving two remaining units available to let in 2019.

Harworth’s chief executive Owen Michaelson said: "We are confident more will sign up to Phase 3.

"We can't give names yet, but we are in advanced negotiations with a number of parties."

Harworth is already working on the next phase of the development, Phase 4.

The group's finance director Andrew Kirkman said: "It's been a phenomenal success. We are attracting world renowned names."

Phase 4 will be around 20,00 sq ft at the back of the current building.

Mr Michaelson said: "There is a focus on high end jobs. Our planning consent doesn't allow for distribution warehouses. It is limited to advanced manufacturing."

Harworth's Waverley Advanced Manufacturing Park (AMP) in Rotherham is the site of the former Orgreave Colliery.

Harworth has signed up some high profile tenants including Rolls-Royce, Boeing and McLaren Automotive, which has taken a 20-year lease on a new 75,000 sq ft unit.

Harworth typically targets high quality tenants in a bid to kick start areas that have been neglected following the the end of deep coal mining in Britain.

The group said its first potential occupier for the Kellingley site in Selby, North Yorkshire, is doing site investigation.

Harworth still has 12 months of remediation to do on the site. The focus will be on rail linked users, typically those that need to shift heavy materials, particularly manufacturers getting ready for HS2.

The group said hundreds of new jobs could be created on the site, bringing £200m of economic benefit to the region.

Kellingley Colliery closed in December 2015 and Harworth took control of the site in March 2016 with an ambitious 10-year plan to revive the area and create more jobs that the original mine offered. The deep mine employed 700 people at its end in 2015.

Analyst James Carswell at Peel Hunt said: "2018 represents another consecutive period of double-digit returns since Harworth re-listed in 2015, yet again spurred on by management’s own efforts.

"NNNAV was up 12.6 per cent in the year, driven by record land sales and 2019 has started strongly with 50 per cent of budgeted residential sales either agreed, in legals or exchanged ahead of book value."